Conversion of a partnership firm into a private or a public limited company
1.Before a conversion of a partnership firm into a private limited company or public limited company. They decide the conversion in following factors.
(a) Whether the company into which the partnership firm will be converted. It will form a private limited company or public limited company.
(b) Whether the partnership firm will be converted into a company by forming a new company. A new company will be formed and then admitted as a partner of an existing partnership firm.
(c) The deduction of tax under the income tax act 1961.
2. If you want to conversion a partnership firm into a company by way of forming a new company then you can:
(a) Make all the partners of your partnership firm become the subscribers to the note of the association. There are only shareholders of the new company.
(b) To form a new company and admit the new company as one of the partners of your existing partnership firm.
3. To form a new company follow the procedure is given under section( 7) of the companies act 2013.
4.If you are converting the partnership firm into a company by making all the partners of the firm. The only subscribers of the memorandum of association. The only shareholders of the new company as specified for conversion. The all existing partners of the partnership firm must only subscribe to the note of the association of the newly registered company and no one else.
5. If the new company is being registered as a public limited company then ensure that. The only subscribers being the partners of the firm are not to be less than seven. If the new company is being registered as a private limited company then ensure that. The only subscribers being the partners of the firm are not to be less than two in numbers.
6. Specify in the objects clause of the memorandum of management. The newly registration company has a specific clause. Which permits the new company to obtain the business. The assets and liabilities of the partnership firm has conversion.
7. Specify in the objects of the association of the newly registered company. The power of directors to enter into agreements and adopt agreements. This is relating to the acceptance of the business. It has also the assets and liabilities of the partnership firm.
8. In the objects of association of the newly registered company. This makes issuing and allocation of shares of the company to all the subscribers. They are the partners of the partnership firm in place of the allocations are transferred to the company.
9. Ensure that the partnership deed contains. An stipulation of transfer of all the allotments of the partners of the partnership firm to the new company.This is one of the modes of dissolution of the partnership firm.
10. Once the new company is registration dissolve the partnership firm. This makes transferring all the profits of the partners of the partnership firm to the newly registered company. It may already provided in the section of association of newly registered companies.
11. Gather a board forum after giving notice to all the directors of the newly registered company immediately. After registration as per section 173 of the companies act 2013 act to adopt. The submission entered into by the company. The partners of the firm for helping. The acquisition of the business of the partnership firm. It is also transferred of shares of the partners of the company. On behalf of allotment of the said company of shares by passing. A board resolution in the said meeting.
12.In the above meeting also fix up the place, time, date and plan for calling. A general meeting to pass a special resolution under section 62 of the companies act 2013. This act gives power to the board of directors to issue and assign interest shares. The allocations to all the partners of the partnership firm in whole and final contentment. In the consideration of transfer of shares of all the partners of the partnership firm to the newly registered company. The company also capture the business of the partnership firm.
13. Beware that every officer of the new registration company whose work is to give notice of the board meeting as same. The officer who fails to do so will be punishable with fine of Rs. 25,000
14. File in electronic mode the statement selected at the board meeting. This is mentioned in item no 11. The ROC e-form is within thirty days of their adoption along with the requisite filing fee as per rule 12 (2) of companies (registration of offices and fees) rules 2014.
15. The e-form is to be filed electronically and file the copies of the said agreements. It is attached in the said e-form. For electronic filing, obtaining Digital Signature Certificate (DSC) and Director Identification Number (DIN) are required. Since the new company is already registered it is assumed that DIN and DSC are already obtained.
16. The distribute notices in writing at least twenty one days. Earlier the date of the general meeting proposing. The particular resolution with desirable explanatory statement.
17. Hold the general meeting and pass resolution by three-fourths majority.
18. File the particular resolution with the relative explanatory statement. Through the concerned ROC in e-Form within thirty days.
19. File the said e-Form electronically and ensure that the copy of the special resolution. The explanatory statement is filed with the said e-Form as attachments.
20. Ensure that the said e-Form is digitally signed by the managing director or director or secretary. The new registration company duly authorized by the board of directors.
21.Further ensure that the said e-Form is digitally signed by the Chartered Accountant or Company Secretary or Cost Accountant in whole time practice of digitally signing the said e-Form.
22. Please keep in mind that if absence is made in obeying with the same requirement of filing within thirty days. It may be the extended period under section 403 with additional fees. The company shall be liable to a fine which shall not be less than Rs. Five lakhs. It may extend to twenty five lakhs. The registration company of every officer who is in default will be punishable with fine of Rs. One lakh. It may extend to Rs. Five lakhs.
23. After holding the general meeting and passing the special resolution is holding another conference. After as per section (173 ) giving notice to all the directors of the company The company is allotted interest shares to all the partners of the liquefied partnership firm as specified in the special resolution by passing a board resolution.
24.Beware that every officer of the company whose duty is to give notice of the board meeting as aforesaid. The officer who fails to do so will be punishable with fine of Rs. 25,000.
25.File return of allotment of shares to the partners of the dissolved partnership firm in e-Form within thirty days from the date of allotment with necessary details and enclosures. The concerned ROC after paying the fees as prescribed under the companies act (registration of offices and fees) rules 2014.
26. File the e-Form PAS-3 electronically and file the enclosures to it as attachments to the said form.
27.Please, keep that in mind. If default is made in obeying with the same requirement. Every officer of the company who is in default for registration in Coimbatore office. The officer will be punishable with fine up to Rs.1000 for every day during which the default continues or one lakh rupees which ever less.
28. Further, keep in mind that the offenses mentioned section 441 of the companies act 2013.
